The ‘Gig Economy’ Is Here To Stay

What new trends will emerge in the next several years with the potential for explosive growth?

We’ll probably get answers at the ‘Top 10 Tech Trends Debate‘ who takes place this week in Santa Clara, in the center of Silicon Valley.

But you don’t need to travel half way around the world to get a glimpse of the future. I just returned from a large start-up event in Poland; and in Romania, ‘Techsylvania 2016‘ kicks off today in Cluj (more info here).

In Poland, I met lot of start up’s promoting their ideas to potential investors. Many projects are indeed promising and – if financially backed – will deepen the digital disruption in Europe.

Don’t think of ‘digital disruption’ as a change that affects the technology- sector only. It affects the whole economy and it affects you as a customer and as an employee.

Web retailers have disrupted department stores and will do the same with all those fancy shopping malls built in Romania in recent years. Amazon will surpass Macy’s as the top clothing store in the US next year. Airbnb, Netflix or Uber have disrupted decade old structures in the tourism- television- or taxi-industry and ‘fintech’ is on its way to disrupt retail-banking. The list goes on and on, but I guess you’ve got the point.

From the Silicon Valley to tech-events in Central/Eastern Europe, the discussion – and promises made to potential investors – is mainly focused on the topic of positive effects new technologies and business models have in terms of the value proposition. That is the benefit a customer will receive by purchasing this particular ‘new’ digital-backed product/service instead of existing ‘old school’ offers.

What is rarely discussed is the fact that in the footsteps of the digital disruption, a new model of employment is following – it’s called the ‘gig-economy’.

The term is taken from musicians looking for a ‘gig’. If they got one, they were paid for the concert and let go to look for themselves finding the next ‘gig’.

In the ‘gig’-economy, cloud-based platforms are making it easier for freelancers to advertise their skills and easier for firms to find the people they need on a short-time basis.

This ‘on-demand-economy’ is basically powered by independent contractors and marketplaces such as ELance or TaskRabbit.

It has never been easier to be your own boss. And the ‘gig’-economy is here to stay, it will continue to evolve, adapt and disrupt. More than 20% of Americans provide ‘gig’-services and 42% have been a patron of on-demand service. The sector is growing everyday and Deloitte Consulting forecasts corporations will “increase” or “significantly increase” their use of contingent workers over the next 3 to 5 years. And this trend – as it happened with so many US trends before – will have an impact in Europe as well.

Brave new world? Well, not so fast. The virtues of flexibility, independence and creativity offered by ‘gig’-work might be true for some, namely for people with vocational skills that are in high demand and a passion for building long-term, self-sustaining career.

But for many others, the ‘gig’-economy is simply the next step in a losing effort to build some economic security, since in today’s business priorities, sustaining the employer/worker-relationship ranks far below building a devoted customer base and delivering value to investors.

Corporations have shed their role as direct employers of the people responsible for their products, in favor of outsourcing work to small companies or contractors that compete fiercely with one another. The result has been declining wages or benefits, inadequate health and safety conditions, and ever-widening income inequality.

Recently released ‘gig’-platforms to park your car (Luxe), buy and deliver your groceries (Instacart) and get you your drinks (Drizly) contain the risk we might devolve into a ‘on-demand’-society in which many end up and compete in serving the privileged few.

It doesn’t require an economic degree to foresee in which direction the compensation for freelancing contractors will turn. But there is more: A new report from the J.P. Morgan Chase Institute suggest that many Americans take part in the ‘gig economy’ not because of a desire to be their one boss, but out of desperation.

Critics should be taken seriously. The  juicy promises sent out by tech-events in the Silicon Valley, Poland and Romania and the harsh realities of everyday people have indeed the potential to be disruptive. Not for the economy only, but for society too.

Some say, the rise of Donald Trump has much to do with the desperation created by the ‘gig-economy’.

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The ‘gig economy’ is taking over. Enabled by technology platforms that connect freelancers to clients – from highly specialized professionals to flexible people in need of an extra income.

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